Viability of Timbercorp’s forests in doubt
When the Australian agribusiness giant Timbercorp fell in 2009, its olive and almond schemes were declared insolvent and its forestry arm left hanging. Behind the receivers’ language sat a hard lesson: an olive grove is a farm, not a share, and it can ruin you either way.
Timbercorp was not a farm you could visit so much as a financial structure with trees attached. It ran managed investment schemes — MIS — that let ordinary Australians buy into plantations of eucalypts, olives, almonds, citrus and more, lured by tax breaks and the promise of a rural harvest paying out down the line. When the company went into administration in 2009 and then liquidation, the receivers found the olive and almond projects hopelessly insolvent: they would cost more to run than the crops could ever return. The forestry arm’s fate was left uncertain while the analysis dragged on.
How the scheme worked
The pitch was seductive. You did not have to know a thing about olives; you bought a slice of a professionally managed grove, claimed the tax deduction, and waited for oil sales to flow back. Thousands did. But the structure hid a fragility: the whole edifice depended on the manager staying solvent and the annual costs of running the groves being met. Trees are not shares in a drawer — they must be watered, pruned, harvested and milled every single year, or they are worthless. That relentless running cost was the trap.
Why the olives were worth less than nothing
The receivers’ verdict on the olive and almond schemes was brutal and clarifying: insolvent, because the cost of keeping them going for even a year outran the value of the harvest. A eucalypt forest is at least an asset — you can fell it and sell the timber. A living olive grove is a liability the moment nobody is paying to tend it: skip a season and you have a neglected orchard and a bill, not a windfall. Investors in the horticulture schemes stood to lose everything but the proceeds of the crop already in the ground.
The lesson that outlives the case
Timbercorp is the reason a certain kind of olive investment deserves deep suspicion. When olives are sold as a financial product — a tax-advantaged scheme, a fractional grove, a passive yield — the money is often made by the promoter and the risk is carried by you. A real olive grove can be a fine thing to own if you understand it is a farm: seasonal, weather-beaten, labour-hungry and cash-consuming before it ever pays. Dressed up as a hands-off investment, it is where a lot of people lost a lot of money.
| The scheme’s promise | The reality | |
|---|---|---|
| What you owned | A managed slice of a grove | A running cost with trees attached |
| Effort | Passive, hands-off | Groves need tending every year or they fail |
| Upside | Tax break plus future oil sales | Sales that never covered the running costs |
| If the manager fails | (Unspoken) | Costs unpaid, crop lost, capital gone |
| Final outcome | A rural nest egg | Insolvency; near-total loss for growers |
What to take from it
- An olive grove is a farm, not a share — it costs money every year whether or not it pays.
- Beware olives sold as a passive, tax-advantaged product; the promoter’s incentives are not yours.
- The scheme collapsed because running costs outran harvest value, not because olives are worthless.
- If you would not run the grove yourself, treat the investment with deep caution.
The Timbercorp olive collapse: common questions
What was Timbercorp?
An Australian agribusiness company that ran managed investment schemes, letting ordinary people buy tax-advantaged stakes in plantations including olives and almonds. It collapsed in 2009.
Why did the olive schemes fail?
They were declared insolvent: the cost of tending and harvesting the groves for even one more year exceeded the value of the crop they could produce.
What happened to the investors?
Growers in the horticulture schemes faced near-total loss of their capital, keeping only the proceeds of crops already in the ground. Around 18,500 people had invested across all schemes.
Why were the forests treated differently?
A timber forest is a saleable asset — the trees can be felled and sold. A living olive grove becomes a liability the moment nobody funds its upkeep.
What is the broader lesson?
Olives sold as a passive financial product carry hidden, relentless running costs. An olive grove is a real farm and must be treated as one, not as a hands-off yield.
I have never trusted an olive grove sold with a prospectus instead of dirt under your fingernails. A grove is not a share certificate you tuck away; it is a hungry thing that wants water, pruning, pickers and a mill every year, forever. Timbercorp’s investors learned that the hard way — the trees kept needing money long after the scheme stopped making it. Owning olives can be a joy if you know it is farming. Sold to you as a passive tax play, it is usually the promoter who eats and the grower who starves.
Drawn from reporting on the 2009 Timbercorp administration and liquidation.